Tata mutual fund common application form equity balanced mis with kim

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Tata Mutual Fund Common Application Form Equity Balanced MIS with KIM

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Tata mutual fund common application form equity balanced mis with kim

  1. 1. Offer for Units at NAV based prices. MONTHLY INCOME SCHEME Tata Monthly Income Fund (Open-ended income schemes. Monthly income is not assured Tata MIP Plus Fund and is subject to the availability of distributable surplus). OPEN ENDED BALANCED SCHEME Tata Balanced Fund OPEN ENDED EQUITY SCHEMES Tata Pure Equity Fund Tata Mid Cap Fund Tata Dividend Yield Fund Tata Select Equity Fund Tata Equity Management Fund Tata Capital Builder Fund Tata Index Fund Tata Growing Economies Tata Equity P/E Fund (Nifty Plan & Sensex Plan) Infrastructure Fund (Plan A & Plan B) Tata Life Sciences & Tata Growth Fund Tata Infrastructure Fund Technology Fund Tata Equity Opportunities Tata Tax Saving Fund Tata Indo-Global Fund (Open ended Equity Infrastructure Fund Linked Savings Scheme)This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing. For furtherdetails of the scheme/Mutual Fund, due diligence certificate by the AMC, Key Personnel, investors’ rights & services, risk factors,penalties & pending litigations etc. investors should, before investment, refer to the Scheme Information Document (SID) andStatement of Additional Information (SAI) available free of cost at any of the Investor Service Centres or distributors or from thewebsite www.tatamutualfund.com.The Scheme particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds)Regulations 1996, as amended till date, and filed with Securities and Exchange Board of India (SEBI). The units being offered forpublic subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM. 9th floor, Mafatlal Centre, Nariman Point, Mumbai – 400 021 Tel. 1800 209 0101 Email: kiran@tataamc.com Website: www.tatamutualfund.com
  2. 2. INVESTMENT OBJECTIVE The Scheme will have a maximum derivative net position of 50% of the net assets of the scheme. ** at the time of investmentsTata Pure Equity Fund (TPEF): The investment objective of the scheme is to provideincome distribution and /or medium to long term capital gains while at all times emphasising Investment Strategy: The moneys collected under this Scheme shall be invested onlythe importance of capital appreciation. in transferable securities in the capital market or in the money market. The scheme willTata Equity Opportunities Fund (TEOF): The investment objective of the Scheme is predominantly invest in equity and equity related instruments of well researched andto provide income distribution and / or medium to long term capital gains while at all times growth oriented companies.emphasising the importance of capital appreciation. The Scheme would invest in companies based on various criteria including soundTata Select Equity Fund (TSEF): The investment objective of the Scheme is to provide professional management, track record, industry scenario, growth prospectus, liquidity ofincome distribution and / or medium to long term capital gains while at all times emphasising the securities, etc. The Scheme will emphasise on well managed, good quality companiesthe importance of capital appreciation. with above average growth rospectus.Tata Tax Saving Fund (TTSF): The investment objective of the Scheme is to provide The Fund may invest in derivatives instruments such as Futures, Options, Forward Ratemedium to long term capital gains along with income tax relief to its Unitholders, while at Agreements (FRAs) & Interest Rate Swaps (IRS) or such other instruments as may beall times emphasising the importance of capital appreciation. permitted under the regulations. The use of derivatives will only be done for hedging andInvestment made in the scheme will qualify for income tax exemption (subject to 3 years portfolio balancing in accordance with the SEBI (Mutual Funds) Regulations and within thelock-in) under section 80C of Income Tax Act 1961. parameters approved by the Trustee Company.Tata Growth Fund (TGF): The investment objective of the Scheme is to provide incomedistribution and / or medium to long term capital gains. TATA SELECT EQUITY FUND (TSEF)Tata Index Fund (TIFN/TIFS): The investment objective of the Scheme is to reflect/mirror **Proportion (%) of funds availablethe market returns with minimum tracking errors. Instrument Minimum Likely Maximum RiskTata Life Sciences & Technology Fund (TLSTF): The investment objective of the Scheme Upto Around upto Profileis to provide income distribution and / or medium to long term capital gains while at all timesemphasising the importance of capital appreciation. Equity and Equity related instruments (Listed) - 100 100 HighTata Dividend Yield Fund (TDYF): The investment objective of the Scheme is to provide Equity and Equity related instruments (Unlisted) - 0 5 Highincome distribution and /or medium to long term capital gains by investing predominantly ** at the time of investments. The scheme net assets will have a maximum derivative netin high dividend yield stocks. position of 50% of the net assets of the scheme. Investment may be made in derivativesTata Mid Cap Fund (TMCF): The investment objective of the Scheme is to provide futures/options for hedging & portfolio balancing.income distribution and / or medium to long term capital gains by investing predominentaly Investment Strategy: The investment would be primarily in equities of growth orientedin equity/equity related instrument of mid cap companies. and well researched companies.Tata Balanced Fund (TBF): The investment objective of the Scheme is to provide income The fund will continue its policy of non-investment in prohibited sectors like Liquor,distribution and / or medium to long term capital gains while at all times emphasising the Tobacco, Consumer Goods, Finance and Banking and other investments in Interestimportance of capital appreciation. Bearing Securities.Tata Monthly Income Fund (TMIF): The investment objective of the Scheme is The fund will invest upto a maximum of 50% of its net assets in any particular sectorto provide reasonable & regular income along with possible capital appreciation to its and can increase the exposure in any particular sector from 50% to 70% after obtainingUnitholder. approval from the Trustees. This would actually help the fund to take advantage of anyTata MIP Plus Fund (TMPF): The investment objective of the Scheme is to provide sector showing immense potential at a time and fully benefit from the same. This wouldreasonable & regular income along with possible capital appreciation to its Unitholder. ensure that whilst the fund is sectoral in nature, it is able to selectively diversify to a limitedTata Equity Management Fund (TEMF): The primary investment objective of the scheme extent in keeping with the market trends. The moneys collected under this scheme shallis to seek to generate capital appreciation & provide long-term growth opportunities by be invested only in transferable securities in the capital market.investing in a portfolio constituted of equity & equity related instruments and the secondary TATA TAX SAVING FUND (TTSF)objective is to generate consistent returns by investing in debt and money market securities.The fund will have the flexibility to invest in a wide range of companies with an objective **Proportion (%) of funds availableto maximize the returns, at the same time trying to minimize the risk by reasonable Instrument Minimum Likely Maximum Riskdiversification and using derivative as a risk management tool. Upto Around upto ProfileTata Growing Economies Infrastructure Fund (TGEIF): Equity and Equity related instruments - 80 100 HighPlan A: Investment objective of the scheme is to generate capital appreciation / income by (Listed/Unlisted)investing predominantly in equities of companies in infrastructure & other related sectorsin the growing economies of the world & in India. The investment focus would be guided Debt & debt related instruments - 10 20 Low toby the growth potential & other economic factors of the countries. Atleast 51% of the net (Listed/Securitised) Mediumassets would be invested in geographies outside India. Debt & debt related instruments - 5 10 Low toPlan B: Investment objective of the scheme is to generate capital appreciation / income (Unlisted/Securitised) Mediumby investing predominantly in equities of companies in infrastructure & other related Money Market Instruments - 5 100 Sovereignsectors in India & other growing economies of the world. The investment focus would ** at the time of investments. Investment by the scheme in securitised debt, will notbe guided by the growth potential & other economic factors of the countries. Majority of normally exceed 20% of the debt investment in the scheme. Investment in derivatives/such investments would be in India. futures/options may be done for hedging & portfolio balancing. The Scheme will have aTata Capital Builder Fund (TCBF): maximum derivative net position of 50% of the net assets of the scheme.The investment objective of the scheme is to generate capital appreciation by investing Investment Strategy: The Scheme will invest primarily in equity / equity relatedpredominantly in equity and equity related instruments of companies across large, mid instruments. The scheme may also invest in debt instruments such as non convertibleand small market capitalization. portion of Convertible Debentures (Khokas), Non Convertible Debentures, SecuritizedTata Equity P/E Fund (TEQPEF): The investment objective of the Scheme is to provide Debt, Secured Premium Notes, Zero Interest Bonds, Deep Discount Bonds, Floatingreasonable & regular income along with possible capital appreciation to its Unitholder. Rate Bonds / Notes, Government securities and Money Market Instrument like Repos,Tata Infrastructure Fund (TISF): The investment objective of the Scheme is to provide Commercial Paper, Certificate of Deposit, Treasury Bills, etc.income distribution and / or medium to long term capital gains by investing predominently The funds collected under the scheme shall be invested in equities, cumulative convertiblein equity/ equity related instrument of the companies in the infrastructure sector. preference shares and fully convertible debentures and bonds of companies. InvestmentTata Indo-Global Infrastructure Fund (TIGIF): The investment objective of the scheme may also be made in partly convertible issues of debentures and bonds including thoseis to generate long term capital appreciation by investing predominantly in equity and equity issued on rights basis subject to the condition that, as far as possible, the non-convertiblerelated instruments of companies engaged in infrastructure and infrastructure related sectors portion of the debentures so acquired or subscribed, shall be disinvested within a periodand which are incorporated or have their area of primary activity, in India and other parts of twelve months.of the world. The investment focus would be guided by the growth potential and other Pending deployment of funds of a scheme in terms of investment objectives of theeconomic factors of the countries. scheme, a mutual fund may invest them in short term deposits of schedule commercial ASSET ALLOCATION PATTERN OF THE SCHEME banks, subject to such Guidelines as may be specified by the Board.TATA PURE EQUITY FUND (TPEF) The Scheme will emphasize well managed, high quality companies with above average growth prospects that can be purchased at a reasonable price. Typically these companies **Proportion (%) of funds available will be highly competitive, with a large and growing market share. In selecting specific Instrument Minimum Likely Maximum Risk stocks, the Asset Management Company will consider and evaluate amongst various Upto Around upto Profile criteria network, consistent growth, strong cash flows, high return on capital etc. Investment in fixed income securities (wherever possible) will be mainly in investmentEquity & Equity related instruments (Listed) - 95 100 High grade listed / unlisted securities. In case of investment in debt instruments that are notEquity and Equity related instruments (Unlisted) - 0 5 High rated, specific approval of the Board of AMC and Trustee Company will be taken.Money Market Instruments - 5 30 Low to TATA GROWTH FUND (TGF) MediumInvestment may be made in derivatives futures/options for hedging and portfolio balancing. **Proportion (%) of funds available** at the time of investments. Instrument Minimum Maximum Risk ProfileInvestment Strategy: TPEF is a diversified equity fund. The overall focus of the fund Equity and Equity related instruments 65 100 Highmanagement is to buy into fundamentally undervalued large cap companies through a process ofrigorous research. Debt* (Including Money Market) 0 35 Low to MediumThe Scheme would invest in companies based on various criteria including sound * Securitised debt will not normally exceed 50% of the debt components. ** at the timeprofessional management, track record, industry scenario, growth prospectus, liquidity of of investments. Investment in derivatives/futures/options may be done for hedging &the securities, etc. The Scheme will emphasise on well managed, good quality companies portfolio balancing. The Scheme will have a maximum derivative net position of 50% ofwith above average growth prospectus. the net assets of the scheme.TATA EQUITY OPPORTUNITIES FUND (TEOF) Investment Strategy: The moneys collected under this Scheme shall be invested only **Proportion (%) of funds available in transferable securities in the capital market or in the money market. As per SEBI Instrument Minimum Maximum Risk Profile (Mutual Funds) Regulations 1996, the Fund shall not make any investments in any un- listed securities of associate/group companies of the Sponsors. The Fund will also not Equity and Equity related instruments 65 100 High make investment in privately placed securities issued by associate/group companies of the Debt* (Including Money Market) 0 35 Low to Medium Sponsors. The Fund may invest not more than 25% of the net assets (of all the Schemes* Securitised debt will not normally exceed 50% of debt & money market instruments. of the Fund) in listed securities (equity & debt instruments) of Group companies.Investment may be made in derivatives futures/options for hedging & portfolio balancing. 2
  3. 3. TATA INDEX FUND The moneys collected under this scheme shall be invested only in transferable securities.Nifty Plan (TIFN) TATA DIVIDEND YIELD FUND (TDYF) **Proportion (%) of funds available **Proportion (%) of funds available Instrument Minimum Maximum Risk Profile Instrument Minimum Maximum Risk ProfileSecurities Covered by the S&P CNX NIFTY 95 100 High High Dividend Yield Equity & equity 70 100 High related instrumentsMoney Market Instruments 0 5 Low to Medium Other equity / equity related 0 30 High instrumentsSENSEX Plan (TIFS) Debt & Money Market Instruments * 0 30 Low to Medium **Proportion (%) of funds available * Securitised debt will not normally exceed 50% of the net assets of the scheme. Investments Instrument Minimum Maximum Risk Profile in derivative instruments may be used in the manner & to extent permissible under SEBI Securities Covered by the BSE SENSEX 95 100 High Regulations. ** at the time of investments. The Scheme will have a maximum derivative Money Market Instruments 0 5 Low to Medium net position of 50% of the net assets of the scheme. Investment Strategy: The fund manager will invest primarily in equity shares that haveThe scheme may invest in derivative instruments like index futures, stock futures, options a high dividend yield. Dividend Yield will is considered as high if it is in greater than thecontracts, warrants, convertible securities, swap agreements or other derivative products, as Dividend Yield of the BSE SENSEX last released / published by BSE. Dividend Yield& when introduced but always subject to regulatory requirement. ** at the time of investments. released / published by the BSE is available on its website: www.bseindia.com.Investment Strategy: Tata Index Fund is a passively managed scheme investing mainly in High Dividend Yield can be defined as the Yield or returns by way of dividend (that is theequity shares of only those companies comprised in the S&P CNX Nifty Index / SENSEX total ` Dividend per share declared for the previous accounting year ) which an equityas may be defined from time to time. The Scheme is not an active Index fund and hence share gives as compared with the market price of the share at the time of investment. Awill be investing/holding securities in the same proportion as that of S&P CNX Nifty / high dividend yielding share is one which gives a higher dividend yield than that of the BSESENSEX regardless of their investment merit. A passively managed scheme like an index SENSEX (last published). e.g. Price of a script : ` 50/- and Dividend Declared : 40% (i.e.fund holds securities in the same proportion as that of a market index in an attempt to ` 4/-on face value ` 10/-) (Total dividend, including interim if any, declared during the lastclosely match the returns generated by the index, subject to tracking errors. accounting year). Hence the dividend yield of the script is: 8% (4 / 50 *100).As part of the Fund Management process, the Trustee Company may permit the use Supposing the dividend yield of the BSE SENSEX as on date of purchase of the aboveof derivative instruments such as index futures, stock futures and options contracts, script is 5%, since the Dividend Yield of the script is more than that of the BSE SENSEXwarrants, convertible securities, swap agreements or any other derivative instruments i.e 8%, the same will be considered as a high dividend yield stock. (Other script selectionthat are permissible or may be permissible in future under applicable regulations and such criteria would only be applicable once the initial dividend yield criteria is fulfilled).investments shall be in accordance with the investment objectives of the scheme. Historically high dividend yielding stocks provide greater degree of protection in a falling market. At the same time, it provides good possibilities of capital appreciation in revivingTATA LIFE SCIENCES & TECHNOLOGY FUND (TLSTF) market, resulting in good capital gains. Re rating for such stocks is always a possibility due **Proportion (%) of funds available to its low price to adjusted book value ratio and its low market capitalization. Investment Instrument Minimum Likely Maximum Risk in high dividend stocks targets to achieve better yield than what is available in interest Upto Around upto Profile bearing securities, but avoiding the undue exposure to the volatile stock markets. It is a general belief that high dividend paying companies are rich in cash generations from itsEquity & Equity related instruments (Listed) - 80 100 High business. At the same time high dividend yield indicates under-pricing for the stock inspiteDebt & debt related instruments - 15 20 Low to of its cash generation. This can unlock potential growth for the stock prices.(Listed/Unlisted/ Securitised)* Medium Since the high dividend yield is only one of the factors involved in the evaluation of aMoney Market Instruments - 5 100 Low to company’s investment-worthiness, investment decisions cannot be based on high Medium / dividend yield alone. Other parameters such as management competitiveness, business Sovereign competitiveness, growth prospects, etc would also be considered. However, all other*Investment by the scheme in securitised debt will not normally exceed 20% of the net factors remaining favourable, investment would be made primarily in high dividend stocksassets of the scheme. Investment in derivatives/futures/options may be done for hedging as mentioned above. Under normal circumstances atleast 70% of the scheme’s assets& portfolio balancing. The Scheme will have a maximum derivative net position of 50% of would be invested in high dividend yield stocks. The Fund could also invest in equitythe net assets of the scheme. ** at the time of investments. shares of other companies i.e other than high dividend stocks to the extent of 30% ofInvestment Strategy: The investments would be primarily in equities of a select group the net assets.of Companies in Life Sciences and Technology Sectors comprising of Engineering, Further the scheme may also invest in not exceeding 30% of the scheme’s assets inTelecommunications, Space, Pharmaceuticals, Information Technology, Electronic and debt instruments such as non convertible portion of Convertible Debentures (Khokas),Electricals, Agrochemicals, Fertilisers, Fast Moving Consumer Goods and various other Non Convertible Debentures, Securitised Debt, Secured Premium Notes, Zero InterestAllied Industries, etc. Bonds, Deep Discount Bonds, Floating Rates Bonds/Notes and Government securities and Money Market Instrument like Call Deposit, Repos, Commercial Paper, Certificate ofSectoral allocation will depend on the growth prospects of the individual sectors from Deposit, Treasury Bills etc. This is for providing ongoing liquidity & preservation of capitaltime to time and their over all valuations. However, not more than 50% of the funds in a bear market.will be invested in any one sector at any given point in time. The Asset ManagementCompany fund manager will have the flexibility to alter weightage of a sector depending TATA MID CAP FUND (TMCF)upon the prospects of each sector and regularly booking profits and realising capital gains **Proportion (%) of funds availableby appropriate turnover of the portfolio. Instrument Minimum Maximum Risk ProfileIt may be noted that the Asset Management Company, may keeping in view the market Equity & Equity related instruments 65 100 Highoutlook, individual company performance, market capitalisation and other relevant of Mid Cap Stocksfactors, may add/delete the names of companies, to the list of below companies. Similarly, Other Stocks 0 35 Highthe Asset Management Company may at any time during the scheme’s period decide to Debt & Money Market Instruments * 0 35 Low to Mediuminclude companies in other segments which form part of the above sector(s). * Investment by the scheme in securitised debt will not normally exceed 20% of the netThe funds available under this Scheme will be invested primarily in equity capital, assets of the scheme. ** At the time of investment. The scheme net assets will have acumulative convertible preference capital, non voting capital, warrants, debt securities maximum derivative net position of 50% of the net assets of the scheme. Investment inconvertible into or carrying the right to acquire equity capital by both established as well derivative instruments may be done for hedging & portfolio balancing. No investments willas emerging growth companies. It is expected that around 80% of funds raised under this be made in foreign securitised debt. Mid Cap companies for the purpose of this Scheme areScheme will be invested in equity and equity related instruments. Investment may also generally those companies that are either included in the CNX Mid Cap Index or one thatbe made in partly convertible issues of debentures and bonds including those issued on fall within market cap requirement of CNX Mid Cap Index. The fund manager will considerrights basis. The balance upto 20% of the Scheme’s investment may be in debt securities the market capitalisation of the company at the time of investment & if it is within the abovesuch as non convertible portion of Convertible Debentures (Khokas), Non Convertible mentioned limits the investment decision would be made, other things being satisfactory.Debentures, Securitised Debt, Secured Premium Notes, Zero Interest Bonds, Deep Investment Strategy: Mid Cap companies for the purpose of this scheme informationDiscount Bonds, Floating Rates Bonds/Notes and Government securities and money document are generally those companies that are either included in the CNX Midcapmarket instrument like call Deposit, Commercial paper certificate of Deposit, short term index or one that fall within market cap requirement of CNX Midcap index.deposit, Treasury Bills and Corporates, Government – State or Central, Public Sector The fund manager will consider the market capitalisation of the company at the time ofUndertakings. Such government securities may include securities which are: investment & if it is within the above mentioned limits the investment decision would be made, other things being satisfactory. Mid Cap companies tend to be under researched and thereby give an opportunity to invest in a company that is yet to be identified by the market. Such companies offer higher growth potential going forward and therefore an opportunity to benefit from higher than average valuations. The Scheme will normallyThis is for providing ongoing liquidity & preservation on capital in a bear market. invest in stocks of mid cap companies having sound track record, quality management,However the above weightages of debt & equity may be changed exceptional earnings and growth potential, strong fundamentals, good market share / export market,circumstances, depending on market conditions, by taking approval of the Trustee quality products, etc.Company. The main aim of such steps will be to protect the interests of the unitholders. The scheme may also invest in debt instruments such as non convertible portion of Convertible Debentures (Khokas), Non Convertible Debentures, Securitised Debt,The Scheme will emphasise well managed, high quality companies with above average Secured Premium Notes, Zero Interest Bonds, Deep Discount Bonds, Floating Rategrowth prospects that can be purchased at a reasonable price. Typically these companies Bonds / Notes, Government securities and Money Market Instrument like Call Deposit,will be highly competitive, with a large and growing market share. In the case of the Repos, Commercial Paper, Certificate of Deposit, Treasury Bills, etc. for providingsmaller companies, they will generally hold a niche position in a rapidly growing sector of ongoing liquidity & preservation of capital in a bear market.the economy. In many cases, thiss will involve the company playing a leading role in thedevelopment of new technologies and products. In selecting specific stocks in various TATA BALANCED FUND (TBF)sector(s) the Asset Management Company will consider and evaluate amongst various **Proportion (%) of funds availablecriteria network, consistent growth, strong cash flows, high return on capital etc. Instrument Minimum Maximum Risk ProfileInvestment in fixed income securities (wherever possible) will be mainly in securities listed Equity & Equity related instruments 65 75 Highas investment grade by a recognised authority like The Credit Rating and Information Debt & Money Market and Cash 25 35 Low toServices of India Limited (CRISIL). Investment Information and Credit Rating Agency of (Listed / Unlisted / Securitised) MediumIndia Limited (IICRA). Credit Analysis and Research Limited (CARE). In case of investmentin debt instruments that are rated, specific approval of the Board will be taken. The Investment by the scheme in securitised debt, will not normally exceed 50% of the netScheme will purchase securities in the public offerings and rights issues, as well as those assets in the scheme. Investment in derivatives/futures/options may be done for hedgingtraded in the secondary markets. On occasions, if deemed appropriate, the Scheme will & portfolio balancing. The scheme net assets will have a maximum derivative net positioninvest in securities sold directly by the issuer, or acquired in a negotiated transaction. of 50% of the net assets of the scheme. ** at the time of investments. 3
  4. 4. Investment Strategy: The Scheme would invest in companies based on various criteria TATA GROWING ECONOMIES INFRASTRUCTURE FUND (TGEIF)including sound professional management, track record, industry scenario, growth Plan A:prospectus, liquidity of the securities, etc. The Scheme will emphasise on well managed,good quality companies with above average growth prospectus whose securities can be ** Proportion (% of Funds Available / Net Assets)purchased at a good yield and whose debt securities are concerned investments (wherever Instrument Minimum Maximum Risk Profilepossible) will be mainly in securities listed as investments grade by a recognised authority Equity & Equity related instruments oflike The Credit Rating and Information Services of India Limited (CRISIL), ICRA Limited companies engaged in infrastructure &(formerly, Investment Information and Credit Rating Agency of India Limited), Credit infrastructure related sectors.Analysis and Research Limited (CARE) etc. In case of investments in debt instruments that - In growing economies other than India. 51 70 Highare not rated, specific approval of the Board will be taken except in case of Government - In India 30 49 HighSecurities being sovereign bonds. However, in case of investment in unrated securities Other Equities & Equity related 0 19 Highprior board approval is not necessary if investment in within the parameters as stipulated instruments of domestic companiesby the board. Debt and Money Market Instruments 0 19 Medium to LowAny change in the asset allocation affecting the investment profile of the scheme shall beeffected only in accordance with the provisions of sub-regulation 15A of regulation 18 of Plan B:SEBI (Mutual Funds) Regulations 1996. ** Proportion (% of Funds Available / Net Assets)TATA MONTHLY INCOME FUND (TMIF) Instrument Minimum Maximum Risk Profile Instrument **Proportion (%) of Funds / Net Risk Profile Equity & Equity related instruments of Asset available companies engaged in infrastructure & Debt (Including Money Market)* 90-100 Low to Medium infrastructure related sectors. Equity and Equity Related 0-10 Medium to High - In India 65 85 High* Investment by the scheme in securitised debt, will not normally exceed 50% of the net - In other growing economies 15 35 Highassets of the Scheme. Investment in derivative instruments may be done for hedging & Other Equities & Equity related 0 20 HighPortfolio balancing & it will not exceed 50% of the scheme’s net assets. ** at the time instruments of domestic companiesof investments. Debt and Money Market Instruments 0 20 Medium to LowTATA MIP PLUS FUND (TMPF) ** At the time of investment. Investment by the scheme in securitised debt, will not normally **Proportion (%) of Funds / Net Asset available exceed 19% of net assets of the scheme. The net notional exposure to derivatives will not Instrument Minimum Maximum Risk Profile exceed 100% of the net assets of the scheme. Debt (Including Money Market)* 80 100 Low to Medium Investment Strategy: Equity and Equity Related 0 20 Medium to HighUnder normal circumstances, the equity allocation in the fund is likely to be around 15% of The scheme will predominantly invest in equity and equity related instruments of companiesthe scheme’s net assets. * Investment by the scheme in securitised debt, will not normally in infrastructure and infrastructure related sectors. Investments will also be made in foreignexceed 50% of the net assets of the Scheme. Investment in derivative instruments may be securities (including units of overseas foreign mutual funds which invests in infrastructuredone for hedging & Portfolio balancing. ** at the time of investments. and related companies) as per the limits defined in the asset allocation pattern of theTATA EQUITY MANAGEMENT FUND (TEMF) respective plans. **Proportion (%) of funds available Planwise investments in domestic and foreign equity and equity related instruments are Instrument Minimum Maximum Risk Profile indicated as under: Equity & Equity related instrument 65 100 High Plan A of the scheme will invest predominantly in infrastructure and infrastructure related Debt, Money Market & securitized 0 35 Low to Medium sector companies in growing economies* including India. Major part of the investment Debt instruments* would be in geographies outside India. (*Including the units of overseas mutual funds which* Investment by the scheme in securitised debt, will not normally exceed 20% of the net inturn invests in infrastructure companies).assets of the Scheme. Investment in derivative instruments may be done for trading aswell as hedging & Portfolio balancing. Exposure to derivative instruments will not exceed Plan B of the scheme will invest predominantly in infrastructure and infrastructure related100% of the portfolio value (i.e net assets including cash). ** at the time of investments. sector companies in India and other countries whose economy is growing. The scheme mayInvestment Strategy: The Broad Investment strategy of the fund will be to invest in invest in the units of overseas mutual funds which inturn invests in infrastructure companies.equity & equity related instruments. The fund will also use the derivatives route to hedge The scheme may also invest in other (other than infrastructure and infrastructure relatedthe equity portfolio & the extent to which the portfolio will be hedged will be linked to sectors) domestic and foreign securities.the P/E of the Index as given in the indicative table below: The extent of hedging of the Portfolio of Overseas/Foreign securities shall be managed by a dedicated Fund Manager,portfolio is determined based on the month end weighted average P/E ratio of the Index, while selecting the securities the Fund Manager may rely on the inputs received fromwhich in this case will be the S&P CNX Nifty. internal research or research conducted by external agencies in various geographies. The Weighted average PE ratio of S&P CNX Nifty Maximum Portfolio hedge as a % of Equity Portfolio fund may also appoint overseas investment advisors / managers to advise/ manage portfolio Upto 14 10 – 20 of foreign securities. 14 – 18 20 – 25 18 – 22 25 – 50 Infrastructure sector comprises of Energy, Power and Power Equipment, Oil & Gas and 22 – 26 50 – 70 related industries, Petroleum and related industries, Coal, Mining, Aluminium and other 26 – 30 70 – 90 Metal Industries, Steel and Steel Utilities, Engineering, Construction and Construction Above 30 90 – 100 Related Industries, Cement, Transportation, Ports, Telecommunications, Housing, BankingThe extent of hedging would involve complete portfolio hedging by way of short position and Financial Services and Healthcare and Related Industries. However, the Scheme willin Index Futures / Options as well as hedging of individual stocks depending upon the fund not restricts its investments only in the above mentioned sectors.managers’ perception of the markets. Hedging would also include but not only limitedto selling of stocks that are not owned by the Fund but are available under derivative growth rate for past three years is 2% or more. In the current scenario developed(Futures & Options) segment in the market for trading from time to time as permitted by economies like USA, Japan, France, Italy, Denmark, Belgium etc may not qualify as growingthe Regulations/ guidelines. economies.The Derivative will be used mainly for the purpose of hedging. However the Fundmanager may if the opportunity exists, use derivatives to earn profit. The derivative For example following countries 3 years GDP growth rate is given below:strategy is illustrated below: Country Name Year 2008 (%) Year 2009 (%) Year 2010 (%) Scenario 1 Scenario 2 India 5.1 7.7 8.6The Fund Manager expects a temporary The Fund Manager expects market to be remain Thailand 2.5 -2.2 7.8correction in the market. strong but expects a fall in Malaysia 4.7 -1.7 7.2Derivative Strategy – Short Nifty Future Contract price of a particular stock say stock AObjective – Hedge against fall in price Derivative Strategy – Short Stock A Future Korea 2.3 0.2 6.1Scheme Corpus ` 100 crore Contract China 9.6 9.1 10.3Investment on Equity ` 80 crore Objective – Earn Profit Mexico 1.5 -6.5 5.5P/E of S&P CNX Nifty 18 Scheme Corpus `100 crore Russia 5.2 -7.9 4.0Hedge Position 25% of Equity Portfolio Investment on Equity ` 80 crore South Africa 3.7 -1.8 2.8Hedging Position Amount 20 crore P/E of S&P CNX Nifty 18 Brazil 5.1 -0.2 7.5Hedge Instrument Index Future Maximum Derivative Position 25% of EquityPosition on the date of maturity/sale of index Portfolio Turkey 0.7 -4.7 8.2future Hedging Position Amount 20 crore. Hedge Source: World Bank and Wolrd Economic Outlook1 - Market movement 5% downside Instrument Stock Future “A “Fall in the Portfolio Value 80 * 5% = 4 crore Position on the date of maturity/sale of index TATA CAPITAL BUILDER FUND (TCBF)Gain in the Index future 20 * 5% = 1 crore future Indicative allocationsNet Loss (4 – 1 ) = 3 crore 1 - Market movement 5% upside Risk Profile Instruments (% of total assets)**However in case of continued upward movement Stock future Movement 5% down side Minimum Maximum High/Medium/of market, the above strategy may not meet the Rise in the Portfolio Value 80 * 5% = 4 crore Upto Upto Lowobjective. Gain in the Stock Future “A” 20 * 5% = 1 crore Equity & equity related Instruments 70 100 High Net Gain (4 + 1 ) = 5 crore Debt & Money Market Instruments* 0 30 Low to Medium However in case of continued upward movement in the price of Stock Future “A”, market the above ** At the time of Investment. * Investment by the scheme in securitised debt, will not strategy may not meet the objective and the normally exceed 20% of net assets of the scheme. scheme may incur loss. Investment Strategy: The Scheme will invest primarily in equity / equity relatedThe fund will, in general invest a significant part of its corpus in equities however pending instruments in large, mid or small caps fund segments. The scheme may also invest in debt instruments such as non-convertible portion of Convertible Debentures (Khokas),and money market instruments. Also whenever good investment opportunity are not Non Convertible Debentures, Securitised Debt, Secured Premium Notes, Zero Interestavailable, or the equity market is not likely to perform in the view of the Fund manager Bonds, Deep Discount Bonds, Floating Rate Bonds / Notes, Government securities andthe Fund will reduce its exposure to equity and during that period the surplus asset of the Money Market Instrument like, Repos, Commercial Paper, Certificate of Deposit, TreasuryFund shall be invested in debt and money market instruments. Bills, etc. for providing ongoing liquidity & preservation of capital in a bear market. 4
  5. 5. However the weightages of debt & equity may be changed in exceptional circumstances, Mechanism (APM) in April 2002, competitive pressures are set to intensify and refinerydepending on market conditions, after taking approval of the Trustee Company. The main upgradation to meet Euro-II & III fuel norms are a given. Telecom is another sector whereaim of such steps will be to protect the interests of the unitholders. The above investment significant progress has been made. India is already the fastest growing mobility marketpolicies are in conformity with the provisions of various constitutional documents viz. in the world.MOA/AOA of the TAML/ Trustee Company, IMA and the Trust Deed. Infrastructure sector comprises of Energy, Power and Power Equipment, Oil & Gas andThe Scheme will purchase securities in the public offerings and rights issues, as well as related industries, Petroleum and related industries, Coal, Mining, Aluminium and otherthose traded in the secondary markets. On occasions, if deemed appropriate, the Scheme Metal Industries, Steel and Steel Utilities, Engineering, Construction and Constructionwill invest in securities sold directly by the issuer, or acquired in a negotiated transaction Related Industries, Cement, Transportation, Ports, Telecommunications, Housing,or issued by way of private placement. The moneys collected under this scheme shall be Banking and Financial Services and Healthcare and Related Industries.invested only in transferable securities. The Scheme will invest primarily in equity / equity related instruments of the companies inTATA EQUITY P/E FUND (TEPEF) infrastructure sector. The scheme may also invest in other equities and debt instruments such as non convertible portion of Convertible Debentures (Khokas), Non Convertible **Proportion (%) of funds available Debentures, Securitized Debt, Secured Premium Notes, Zero Interest Bonds, Deep Instrument Minimum Maximum Risk Profile Discount Bonds, Floating Rate Bonds / Notes, Government securities and Money Market Equity & Equity Related (Companies whose 70 100 High Instrument like Call Deposit, Repos, Commercial Paper, Certificate of Deposit, Treasury rolling P/E at the time of investment is lower Bills, etc. for providing ongoing liquidity & preservation of capital in a bear market. than the rolling P/E of the BSE SENSEX) The Scheme will emphasize well managed, high quality companies with above average Equity and Equity Related (Others Companies) 0 30 High growth prospects that can be purchased at a reasonable price. Typically these companies will be highly competitive, with a large and growing market share. In selecting specific Debt (Including Money Market)* 0 20 Low to Medium stocks, the Asset Management Company will consider and evaluate amongst variousInvestment by the scheme in securitised debt, will not normally exceed 50% of debt & criteria network, consistent growth, strong cash flows, high return on capital etc.money market instruments. Investment in derivative instruments may be done for hedging Investment in fixed income securities (wherever possible) will be mainly in investment& Portfolio balancing. The scheme will have maximum derivative net position of 50% of grade listed / unlisted securities. In case of investment in debt instruments that are notthe net assets of the scheme. ** at the time of investments. rated, specific approval of the Board of AMC and Trustee Company will be taken.Investment Strategy: The scheme seeks to identify under valued companies and under Tata Indo-Global Infrastructure Fund (TIGIF):normal circumstances at least 70% of the net assets would be invested in shares whichhave a rolling P/E ratio based on the past four quarterly earnings for individual companies Indicative allocationsas compared with the rolling P/E of the BSE SENSEX based on past four quarterly Instruments (% of total assets)** Risk Profileearnings of the BSE SENSEX stocks. Sometimes the P/E ratio is also referred as the “P/E High/multiple”, because it could be an indication of how much investors may be willing to pay Minimum Maximum Upto Upto Medium/per rupee of earnings. A company with a high P/E ratio may have to eventually live up to Lowthe high expectations of the investors by substantially increasing its earnings, failing which Equity and equity related Instruments ofits stock price could drop. It may be useful to compare the P/E ratios of companies in the 65 85 High domestic companiessame industry, or to the market in general, or against the company’s own historical P/E. Foreign Securities^ (as permitted by SEBI/RBI*) 15 35 HighThe rolling P/E of the last completed quarter is considered for the company as well as forthe BSE SENSEX. The rolling P/E is used, and not the forward P/E, as forward P/E is based Debt and Money Market instruments# 0 20 Medium toon estimates of future profits, and is therefore uncertain. The Fund would invest in stocks Lowwhich are a part of the BSE SENSEX as well as in those which are not a part of the BSE ** At the time of Investment.SENSEX. There could also be companies which are poised for a sharp turnaround or a ^ Includes ADRs/GDRs issued by Indian companies, equity of overseas companies listedsubstantial improvement in profitability wherein the rolling EPS (and therefore the rolling on recognized stock exchanges overseas, units/securities issued by overseas mutual fundsP/E) may not be truly representative of the company’s valuations. The Fund may also or unit trusts which invest in the aforesaid securities and are registered with overseasinvest in such companies (whose rolling P/E may be higher than that of the BSE SENSEX), regulators and Overseas exchange traded funds (ETFs) which invest predominantly in equitybut such investments would be restricted to 30% of the net assets / funds available. and equity related instruments of companies engaged in infrastructure and infrastructureSince the P/E ratio is only one of the factors involved in the evaluation of a company’s related sectors.investment-worthiness, investment decisions cannot be based on this ratio alone. Other * Subject to applicable regulatory limits. Under current regulations, the fund managers willparameters such as management competitiveness, business competitiveness, growth seek to invest more than 65% of net assets in equity shares of domestic companies andprospects, etc would also be considered. However, all other factors remaining favourable, around 35% of its net assets in Foreign Securities in order to avail of the prevailing taxinvestment would be made only if the rolling P/E of the scrip is less than the rolling P/E benefit of long term capital gains. However, investments in Foreign Securities could beof the BSE SENSEX at the time of investment. In the case of an initial public offering of lower than 35% of the net assets due to the limit set on investments in Foreign Securitiesequity shares of a company (i.e. there is no traded price available), the book-building or could be in excess of 35% of its net assets subject to the Eligible Investment Amount inprice or the issue price would be considered in lieu of the traded price for the purposes case of amendment in the tax laws. Investment in excess of 35% of net assets in foreignof computation of the P/E ratio of the company. securities shall be made only after compliance with the applicable regulatory procedures.The Tata Equity P/E Fund would seek to identify undervalued companies in the market, Atleast 65% of investment in domestic securities as well as 65% of investment requiredand predominantly invest in companies whose rolling P/E is lesser than that of the BSE in foreign securities would be made in equity / equity related instruments of companiesSENSEX (these companies may or may not be a part of the BSE SENSEX). The Fund engaged in infrastructure sectors and infrastructure related sectors. (This includes units ofcould also invest in equity shares of other companies and in debt and money market overseas mutual funds and overseas exchange traded funds which invest predominantly ininstruments to the extent of 30% of the net assets. foreign equity / foreign equity related instruments of companies engaged in infrastructureTATA INFRASTRUCTURE FUND (TISF) sectors and infrastructure related sectors). # Investment by the scheme in securitised debt will not normally exceed 20% of net Indicative allocations assets of the scheme. Risk Profile **(% of total assets) Investments in derivative instruments may be used in the manner and to the extent Instrument Minimum Maximum High/Medium/ permissible under SEBI Regulations. The scheme may use derivatives upto the maximum Upto Upto Low limit permitted under SEBI Regulations from time to time. Not more than 25% of the net assets of the scheme shall be deployed in securities lending.Equity and Equity related instruments of The Scheme would limit its exposure, with regards to securities lending, for a single 70 100 Highcompanies in the infrastructure sector intermediary, to the extent of 5% of the total net assets of the scheme at the time of lending.Equity and equity related instruments of The AMC may from time to time for a short term period on defensive consideration invest 0 30 High upto 100% of the funds available in money market instruments, the primary motive beingother companies to protect the Net Asset Value of the Scheme and protect unitholders interests as also toDebt and Money Market instruments* 0 30 Low to medium earn reasonable returns on liquid funds maintained for redemption/repurchase of units.* Securitised debt will not normally exceed 50% of the debt & money market The Investment Strategies: The Fund aims to maximize long-term total return byinstruments. Investments in derivative instruments may be done for hedging & portfolio investing in equity and equity-related securities and / or Units of equity funds / Sharebalancing.The Scheme will have a maximum derivative net position of 50% of the net classes of companies, which are incorporated, or have their area of primary activity, inassets of the scheme. ** at the time of investments. Infrastructure sector comprises of India and in other parts of world, the Fund may also invest in depository receipts includingEnergy, Power & Power Equipment, Oil & Gas & related industries, Petroleum & related American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), debtindustries, Coal, Mining, Aluminium & other Metal Industries, Steel & Steel Utilities, securities convertible into common shares, preference shares, warrants and units ofEngineering, Construction & Construction Related Industries, Cement, Transportation, overseas exchange traded funds.Ports, Telecommunications, Housing, Banking & Financial Services & Healthcare & Infrastructure sector plays important role in country’s development and GDP growthRelated Industries. India has already negotiated the difficult transition from public infrastructure creation toInvestment Strategy: Infrastructure sector plays important role in country’s a market-determined model. An ambitious reform programme initiated involving a shiftdevelopment and GDP growth. India has already negotiated the difficult transition from from a controlled to an open market economy has opened doors for private sector / foreignpublic infrastructure creation to a market-determined model. An ambitious reform investment in infrastructure projects such as energy, petroleum, telecommunicationsprogramme initiated involving a shift from a controlled to an open market economy has transportation sectors etc. And in the Indian context, removal of regulatory and availabilityopened doors for private sector / foreign investment in infrastructure projects such as constraints on any product or service, has catalyzed investments, attracted competitionenergy, petroleum, telecommunications transportation sectors etc. And in the Indian and rationalized costs leading to a new growth trajectory.context, removal of regulatory and availability constraints on any product or service, The infrastructure sector in the country is thus poised for accelerated growth in thehas catalyzed investments, attracted competition and rationalized costs leading to a new coming years. There is already momentum in highways, power generation and ports,growth trajectory. The infrastructure sector in the country is thus poised for accelerated where a successful track record has fostered a virtuous cycle of more success.growth in the coming years. There is already momentum in highways, power generation Infrastructure sector comprises of Energy, Power and Power Equipment, Oil & Gas andand ports, where a successful track record has fostered a virtuous cycle of more success. related industries, Petroleum and related industries, Coal, Mining, Aluminium and otherWith India rapidly moving on the path to establishing itself as a global sourcing base for Metal Industries, Steel and Steel Utilities, Engineering, Construction and Constructionmanufactured products and gearing up to carve a share of the textile opportunity post- Related Industries, Cement, Transportation, Ports, Telecommunications, Housing, Bankingquota removal in 2005, it is imperative that ports be modernized. The macro-level fiscal and Financial Services and Healthcare and Related Industries. However, the Scheme willbudget linked solution for the overdues of SEBs to utilities (NTPC, NHPC), the successful not restricts its investments only in the above mentioned sectors.implementation of the Accelerated Power Development & Reforms Programme (APDRP) However the weightages of debt & equity may be changed in exceptional circumstances,to modernize the overloaded T&D network and the legislation of comprehensive reforms depending on market conditions, after taking approval of the Trustee Company. The mainby way of the Electricity Act 2003 all have paved way for large investment in the Power aim of such steps will be to protect the interests of the unitholders. The above investmentsector. The biggest trigger for the oil & gas sector is the large gas finds. Besides, with policies are in conformity with the provisions of various constitutional documents viz.the sector put on the reform track beginning with dismantling of Administered Pricing MOA/AOA of the TAML/ Trustee Company, IMA and the Trust Deed. 5
  6. 6. The Scheme will purchase securities in the public offerings and rights issues, as well as countries, the portfolio shall be exposed to the political, economic and social risksthose traded in the secondary markets. On occasions, if deemed appropriate, the Scheme with respect to each country. However, the portfolio manager shall ensure that hiswill invest in securities sold directly by the issuer, or acquired in a negotiated transaction exposure to each country is limited so that the portfolio is not exposed to one country.or issued by way of private placement. The moneys collected under this scheme shall be Investments in various economies will also diversify and reduce this risk. In respect ofinvested only in transferable securities. the corpus of the Scheme that is invested in overseas mutual fund schemes, investors RISK PROFILE OF THE SCHEMES shall bear the proportionate recurring expenses of such underlying scheme(s), in addition to the recurring expenses of the Scheme. Therefore, the returns attributable to suchMutual Fund Units involve investment risks including the possible loss of principal. Please investments by the Scheme may be impacted or may, at times, be lower than the returnsread the SID carefully for details on risk factors before investments. that the investors could obtain by directly investing in the said underlying scheme. TheScheme specific Risk Factors are summarized below: scheme being sector specific will be affected by risks associated with the InfrastructureTDYF: Risk associated with high dividend yield stocks : Though the investments would be sector.in companies having a track record of dividend payments, the performance of the scheme RISK MITIGATION MEASURESwould interalia depend on the ability of these companies to sustain dividends in future. (A) Risk mitigation measures for equity investments:TGEIF: To the extent the assets of the scheme are invested in overseas financial assets,there may be risks associated with currency movements, restrictions on repatriation & Investment in equity has an inherent market risk which can not be mitigated generally.transaction procedures in overseas market. Further, the repatriation of capital to India However following measures have been implemented with an objective to mitigate /may also be hampered by changes in regulations or political circumstances as well as the control other risks associated with equity investing:application to it of other restrictions on investment. In addition, country risks would includeevents such as introduction of extraordinary exchange controls, economic deterioration, Nature of Risk Mitigation Measuresbi-lateral conflict leading to immobilization of the overseas financial assets & the prevalent Regulatory Risktax laws of the respective jurisdiction for execution of trades or otherwise. System.The Scheme may also invest in ADRs / GDRs / Foreign Debt Securities as permitted byReserve Bank of India & Securities & Exchange Board of India. To the extent that somepart of the assets of the Schemes may be invested in securities denominated in foreign Poor Portfoliocurrencies, the Indian Rupee equivalent of the net assets, distributions & income may be Quality research.adversely affected by the changes in the value of certain foreign currencies relative to theIndian Rupee. The repatriation of capital also may be hampered by changes in regulations committee.concerning exchange controls or political circumstances as well as the application to it of Performance Riskother restrictions on investment.As the portfolio will invest in stocks of different countries, the portfolio shall be exposed to as peer group.the political, economic & social risks with respect to each country. However, the portfoliomanager shall ensure that his exposure to each country is limited so that the portfolio Liquidity Riskis not exposed to one country. Investments in various economies will also diversify & capitalization, average volume in the market vis. a vis. Portfolioreduce this risk. Holding)In respect of the corpus of the Scheme that is invested in overseas mutual fund schemes, Concentrationinvestors shall bear the proportionate recurring expenses of such underlying scheme(s), Riskin addition to the recurring expenses of the Scheme. Therefore, the returns attributableto such investments by the Scheme may be impacted or may, at times, be lower than the portfolio.returns that the investors could obtain by directly investing in the said underlying scheme. Further, with respect to investments in overseas securities, apart from other risks, thereThe scheme being a sector specific scheme, will be affected by the risks associated with is an inherent risk of currency fluctuation which can not be mitigated. However, the fundInfrastructure and related sectors. will strive to minimize such risk by hedging in the FOREX market as and when permitted.TMIF and TMPF (Monthly Income is not assured and is subject to the availabilityof distributable surplus) : As with debt instruments, changes in interest rate may affect (B) Risk mitigation measures for debt & related investments:the Scheme’s net asset value as the prices of instruments generally increase as interest rates Nature of Risk Mitigation Measuresdecline and generally decrease as interest rates rise. Prices of long-term securities generallyfluctuate more in response to interest rate changes than do short-term securities. Indian Liquidity Riskdebt and government securities markets can be volatile leading to the possibility of pricemovements up or down in fixed income securities and thereby to possible movements with expected outflow.in the NAV. Trading volumes and settlement periods may restrict liquidity in equity anddebt investments.TIFN/TIFS: Tracking errors are inherent in any index fund and such errors may cause the redemptionscheme to generate return which are not in line with the performance of the S & P CNX Credit RiskNifty / BSE SENSEX or one or more securities covered by / included in the S & P CNXNifty / BSE SENSEX. To the extent that some assets/ funds may be deployed in StockLending / Money Market Operations, the Scheme will be subject to risks relating to suchdeployment / operations and may also contribute to tracking errors. The deviation of theNAV of the respective plan from the Sensex or Nifty is expected to be in the range of 2-3% Interest Rate Riskper annum. However it may so be that the actual tracking error can be higher or lowerthan the range given. In case of investments in derivative instruments like index futures,the risk/reward would be the same as investments in portfolio of shares representing an objective & strategyindex. However, there may be a cost attached to buying an index future. Further, therecould be an element of settlement risk, which could be different from the risk in settling Regulatory Risk Online monitoring of various exposure limits by the Front Officephysical shares and there is a risk attached to the liquidity and the depth of the index futures System Also as a back up, manual control are also implementedmarket as it is an untested market.TMCF: In case of Tata Mid Cap Fund, Trading Volumes and Settlement Periods may restrict Common points for risk strategy for TMIF & TMPF: The Scheme would investliquidity in equity and debt investments. In case of mid cap companies such liquidity risks in companies based on various criteria, both qualitative & quantitative, such as soundis likely to be high. Further prices of stock in mid cap companies are also likely to be financials, past track record, growth prospects, industry scenario, professionalmore volatile. management, external credit rating, tenor, yield, liquidity of the securities etc. TheTEMF: Risks associated with Derivatives Derivative products are specialised instruments scheme invests in instruments rated as investment grade by the recognised rating agenciesthat require investment techniques and risk analysis different from those associated with like, CRISIL, ICRA, CARE, FITCH etc. In case of investments in unrated debt instruments,stocks and bonds. Derivatives require the maintenance of adequate controls to monitor the specific approval of the Board will be obtained.transactions entered into, the ability to assess the risk that a derivative add to the portfolio (C) Scheme Specific Risk Mitigation Measures:and the ability to forecast price of securities being hedged and interest rate movements Tata Infrastructure Fund / Tata Growing Economies Infrastructure Fund: Thecorrectly. There is a possibility that a loss may be sustained by the portfolio as a result Scheme will invest predominantly in the equity / Equity related instruments of companiesof the failure of another party (usually referred to as the “counterparty”) to comply with engaged in infrastructure & infrastructure related sectors. The slowdown in thethe terms of the derivatives contract. Other risks in using derivatives include the risk of infrastructure & related sectors due to any unforeseen circumstances may result in undermis-pricing or improper valuation of derivatives and the inability of derivatives to correlate performance of stocks in which the fund has invested. Under such circumstances, toperfectly with underlying assets, rates and indices. reduce the adverse impact of slowdown, the Fund Manager will focus on stock specificTLSTF: The scheme being a sector specific scheme, will be affected by the risks associated opportunities in the sector & try to veer capital allocation towards better performingwith Life Sciences and Technology sectors. companies within the sector those companies which are likely to grow at above averageTISF: The scheme being sector specific will be affected by risks associated with the rate & also avail the leeway to use cash/investment permitted in other sectors as a tacticalInfrastructure sector. call.TIGIF: Risk Associated with overseas investments: Tata Life Sciences & Technology Fund: The Scheme will invest predominantly in the To the extent the assets of the scheme are invested in overseas financial assets, there may equity / Equity related instruments of companies in life sciences & technology sectors.be risks associated with currency movements, restrictions on repatriation and transaction The slowdown in such sectors due to any unforeseen circumstances may result in underprocedures in overseas market. Further, the repatriation of capital to India may also be performance of stocks in which the fund has invested. Under such circumstances, tohampered by changes in regulations or political circumstances as well as the application to reduce the adverse impact of slowdown, the Fund Manager will focus on stock specificit of other restrictions on investment. In addition, country risks would include events such opportunities in the sector & try to veer capital allocation towards better performingas introduction of extraordinary exchange controls, economic deterioration, bi-lateral companies within the sector those companies which are likely to grow at above averageconflict leading to immobilization of the overseas financial assets and the prevalent tax rate & also avail the leeway to use cash/investment permitted in other sectors as a tacticallaws of the respective jurisdiction for execution of trades or otherwise. The Scheme call.may also invest in ADRs / GDRs / Foreign Debt Securities as permitted by Reserve Bank Tata Mid Cap Fund: The Scheme will invest predominantly in the mid cap stocks acrossof India and Securities and Exchange Board of India. To the extent that some part of the the diversified universe of the sectors. These stocks can underperform the Large Capassets of the Schemes may be invested in securities denominated in foreign currencies, stocks because there is an inherent risk of volatility & liquidity associated with the Midthe Indian Rupee equivalent of the net assets, distributions and income may be adversely Cap stocks which can not be mitigated. However, in order to minimise such risks, theaffected by the changes in the value of certain foreign currencies relative to the Indian Fund Manager will focus on stock specific opportunities in the Mid Cap gamut & try toRupee. The repatriation of capital also may be hampered by changes in regulations veer capital allocation towards better performing companies which are likely to growconcerning exchange controls or political circumstances as well as the application to it at above average rate & also avail the leeway to use cash/investment permitted in otherof other restrictions on investment. As the portfolio will invest in stocks of different sectors as a tactical call. 6

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